Candlestick Patterns

Patterns Are Descriptions, Not Guarantees

A candlestick pattern is a named way of describing how open, high, low and close related across one or more periods. Traders use them as clues about hesitation, rejection or momentum—not as automatic buy or sell buttons.

The same shape can mean different things at a support zone, in the middle of a range, or after a long trend. Context first; pattern second.

Single-Candle Formations

Two- and Three-Candle Ideas

• Engulfing — a candle whose body fully covers the previous body; often discussed as a potential shift in control
• Harami — a smaller body contained inside the prior body; can suggest a pause or loss of momentum
• Morning / evening star — three-candle sequences often taught as possible reversal structures after a move
• Three soldiers / three crows — consecutive strong candles in one direction; momentum language, still needs structure context

Rules That Keep Patterns Useful

• Ask where the pattern appeared—support, resistance, trend or mid-range?
• Check the higher timeframe before acting on a lower-timeframe pattern
• Wait for the candle to close before “calling” the pattern
• Use volume, structure or a planned confirmation rule—don’t rely on the name alone
• Define invalidation (where the idea is wrong) before you enter

Practise Without Hindsight Bias

Finished charts make patterns look obvious. Market Replay lets you watch candles form in sequence so you can mark what you would have done—then review after the session. That habit builds judgment faster than screenshot-based pattern quizzes.